Transcript Slide 1

You’re a 501(c)3…
Now What?
The next steps for a non-profit
organization
Key Points
The following must be done in the process of the
formation of a non-profit organization:
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Establish and develop a board of directors
Complete and file required documents
Maintain up-to-date records
Organize and hire required staff
Raise funds, develop a plan to maintain funding
Develop a marketing plan
Make plans for long-term growth and development
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Board of Directors
The board of directors for a non-profit is
responsible for overseeing and managing the
affairs of the organization. A board of directors
consisting of at least three members is required
in Indiana. Due to conflict of interest
considerations, the board should not consist of
employees or family members of employees.
For more information on board development,
please consult the OFBCI resource entitled
Boards and Governance.
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Required Documents
The following documents are essential to the
formation of a non-profit:
 Articles of Incorporation
 Vision Statement
 Mission Statement
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Articles of Incorporation
The Articles of Incorporation are to be filed with the Indiana
Secretary of State’s office. A template of the document
may be found on the Secretary of State’s website, at
http://www.in.gov/icpr/webfile/formsdiv/04162.pdf.
Information required in this document includes:
 Name and principal office address
 Purpose of organization (optional)
 Type of corporation
 Public benefit corporation
 Religious corporation
 Mutual benefit corporation
 Registered Agent (for a list of registered agents in Indiana, visit
http://www.registered-agent-listings.com/)
 Membership
 Incorporators
 Distribution of assets upon dissolution/final liquidation
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Vision Statement
An organization’s vision statement
expresses its overall goal for the future.
What are the values and beliefs that
inform the organization’s work? What
would the organization hope to eventually
accomplish? A vision statement can be
broader and more idealistic than the
mission statement, discussed in the next
section.
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Mission Statement
An organization’s mission statement
describes the organization’s overall
purpose. How does the organization plan
to work toward this broad vision? For
whose benefit does the organization exist?
The mission statement is more specific
and immediate than the vision statement.
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Record-Keeping
The following records, in either paper or electronic
form, should be kept on file and up-to-date in a
secure location within the organization:
 Financial Records: The organization should
establish a budget and have an accounting system in
place that tracks all revenue and expenses. For more
information, please see the OFBCI resource on
Financial Management.
 Corporate Documents: Corporate documents that
should be filed and kept include board meeting
minutes, bylaws, Articles of Incorporation, and other
official records.
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Record-Keeping
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 Personnel Records: The following personnel records should be
kept for each employee from the point of hire: job description,
application, resume, employee contract, Social Security Number,
W-2 form, performance appraisals, notices of promotion, and
disciplinary actions. An employee handbook which addresses
hiring practices, work hours, payroll status, holiday/vacation/sick
leave, pension, etc. should be established and given to each
employee.
 Program Activity Records: Program Activity Records are not a
legal requirement, but are recommended. These would include
information on the nature of services provided by the
organization, the number of clients served, basic characteristics
of the client population, and all contracts into which the
organization has entered. These records should be kept
available for at least 3-5 years.
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Staffing the Organization
Before staffing an organization, make sure to map
out a detailed plan of what kind of staff the
organization is looking for: full-time or part-time;
paid or volunteer; skilled, semi-skilled, or
unskilled. If the organization will require
volunteers, determine how they will be recruited
(volunteer centers, word of mouth, churches,
corporations, etc). Draft job descriptions for all
volunteer positions and set up a system for
interviewing potential volunteers. The work of all
staff members and volunteers should be
reported to the board.
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Resource Development
The organization’s funds should come from a
diverse variety of sources. Two of the most
common methods of securing financial
resources for non-profit organizations are
developing grant proposals and soliciting
donations.
For more information on resource development,
refer to the OFBCI resources on this topic.
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Resource Development –
Proposals
The requirements of writing grant proposals vary
depending on each individual funder’s
requirements, but the following are general
guidelines to preparing any grant proposal:
 Use clear, concise language
 Follow instructions and thoroughly address all criteria
required by the funder
 Make sure the organization’s mission is a clear and
common theme in the proposed programs
For further information regarding developing
proposals, refer to the OFBCI resources on
grant-writing.
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Resource Development –
Donations
When soliciting donations, there are a few important factors
to consider.
 Be sure to cultivate relationships with potential donors before
soliciting them
 Once a donation has been secured, determine and report the
classification of the gift based on three factors:
 Restrictions on the gift according to the donor’s wishes
 Liquidity (Is the donation cash or non-cash?)
 Appreciation and income (realized or unrealized) that may be
earned on the donation and donor restrictions on either
 Provide a statement of contribution to the donor for all gifts
greater than $75 for the donor’s tax purposes
 All contributions must be recorded!
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Marketing
Steps for non-profit marketing:
 Identify who the organization’s market is. Who does the organization
want to reach? This may include current and potential clients,
donors, volunteers, etc.
 Develop a goal for each market. What message(s) would the
organization like to convey to each of the target audiences?
 Choose a method of communication
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Press releases
Public Service Announcements
Brochures
Direct Mail*
 Keep in mind that word-of-mouth from clients, volunteers, and the
community is one of the most powerful marketing tools at an
organization’s disposal – and it’s free!
*Non-profit organizations may be eligible for a discounted bulk rate for
non-profits. Check with the local post office to find out how to apply.
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Facilities
There are a few important considerations to take
into account when planning the facilities that the
organization will be using:
 The building should be easily identifiable and
present a positive image of the organization.
 All facilities should be accessible to clients, and
must comply with the Americans with Disabilities
Act (http://www.usdoj.gov/crt/ada/smbusgd.pdf).
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Long-Term Considerations
Once an organization is established, it should begin to focus on the
long-term considerations that will ensure the organization remains
successful:
 Evaluation: In order to evaluate whether a program is effective in its
services, there should be a plan for periodic measurement and analysis
of the outputs and outcomes of the programs. The organization may
also choose to hire an outside consultant for assistance in strengthening
all aspects of the organization.
 Staff Transitions: An organization should always be cognizant of the
possibility of personnel changes. A succession plan should be in place
in case of the departure of key board or staff members. Also, as an
organization evolves, keep in mind the option of strategic changes and
additions to staff.
 Growth and Development: Any organization is constantly growing and
changing. Because of this, a successful organization should be adaptive
and flexible, yet still maintain a strong sense of mission for the work that
it has set out to do.
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Characteristics of a Successful
Organization
There are many qualities that a successful nonprofit organization possesses, but the following
are a few of the most basic:
 Strong and dedicated leadership on the board of
directors
 Staff that are capable and committed to the program’s
mission
 Volunteers and systems which support the mission
and the services provided by the organization
 A diversified revenue base
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Final Note
This is not an exhaustive resource for all
non-profit organizations.
Consult the following resources for more
information on this topic.
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Additional Resources
 BoardSource “Starting a Nonprofit Organization”
http://www.boardsource.org/dl.asp?document_id=17
 Foundation Center “Establishing a Nonprofit Organization”
http://foundationcenter.org/getstarted/tutorials/establish/
 Free Management Library “Starting Your Nonprofit”
http://www.managementhelp.org/strt_org/strt_np/strt_np.htm
 Indiana Code Title 23, Article 17 “Nonprofit Corporations”
http://www.in.gov/legislative/ic/code/title23/ar17/
 IRS “Life Cycle of a Public Charity”
http://www.irs.gov/charities/charitable/article/0,,id=122670,00.html
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Information in this presentation was adapted from
the following:
 BoardSource eBook
Starting a Nonprofit Organization
 Foundation Center
www.foundationcenter.org
 Free Management Library
www.managementhelp.org
 Watters, Michael R., Esq. How to Plan and Organize a
Nonprofit Corporation. Baker & Daniels: Indianapolis. 1996.
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